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Station Ownership and the Provision and Consumption of Radio News

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Station Ownership and the Provision and Consumption of Radio News Station Ownership and the Provision and Consumption of Radio News Joel Waldfogel The Carlson School and Department of Economics University of Minnesota April 5, 2011 0 This study aims to provide some evidence on the availability of radio news, along with evidence about the relationship between station ownership and the availability of news programming. Ownership of radio stations can affect their targeting – and the appeal they have for listeners – for a variety of reasons. First, joint ownership of stations can affect owners’ positioning incentives. A firm owning many stations in a market may have an incentive to reduce format duplication and therefore may offer more variety than a similar number of atomistic stations would offer. Second, joint ownership – within or across markets – can reduce costs, possibly allowing a given-sized audience to support more stations and variety. Just as this may operate overall – across radio formats – it may operate among news formats as well.1 Finally, the nature of the station’s owner may affect the station’s targeting. First, a news radio station owned by a firm operating a newspaper may be able to operate with lower costs. Thus, markets with cross-ownership may have more available news stations. Second, there is some evidence that the presence of minority owners increases the amount of programming targeted at minority listeners. Minority ownership – relatively rare overall – is quite uncommon in news. Public station ownership, on the other hand, is quite common for news (along with classical and jazz programming). Existing literature provides reason to believe that public news stations are sufficiently dissimilar to commercial stations so that public stations would not simply displace commercial stations and would instead provide additional, 2 distinct varieties. Accordingly, this study will examine the influence of four aspects of station 1 These mechanisms are explored in Steiner (1952), Rogers & Woodbury (1996), Alexander (1997), Berry and Waldfogel (2001), DiCola (2010), and Sweeting (2010). 2 See Berry and Waldfogel (1999) for evidence on public radio’s impact. See Dubin and Spitzer (1993) or Siegelman and Waldfogel (2001) for evidence of the impact of minority ownership on programming availability. 1 ownership on the provision of news programming: 1) group ownership, 2) ownership concentration in the local market, 3) public station ownership, and 4) cross ownership. The study proceeds in four sections after the introduction. Section 2 describes the data employed in the study. Section 3 simply characterizes the availability of radio news programming, as well as news listening, in US radio markets. One way of characterizing the availability of programming is by counting the number of stations in a given radio format. While there are many distinct formats offering music (top 40, adult contemporary, and so on), there are very few formats under the heading of news. The vast majority are termed simply, “news.” A small group offers “business news.” We can, however, distinguish commercial and public news stations. Because of the possibility that commercial and public news stations offer different programming, we revisit the question of their substitutability in section 4 as an aid to characterizing the availability of programming. Section 5 then turns to analysis of the determinants of the availability of news programming: we ask how concentration, group ownership, public station ownership, and cross ownership affect both the availability of news offerings and the extent of news listening in US radio markets. A word about the challenge of uncovering causal relationships is in order at the outset. Unlike an academic study undertaken because events – such as deregulatory policy “experiments” – make it relatively easy to ascertain the causal impact of, say, ownership concentration on programming variety, this study is prompted by policy makers’ interest in the question and their interest in seeing whether relationships documented in earlier research hold in the period 2005-2009. This recent period, while of interest, is not a period of policy in radio ownership rules such as the Telcommunications Act of 1996. The absence of a major policy 2 “experiment” makes causal inference more difficult. I will attempt to interpret findings accordingly. II. Data Description The basic data for this study is a market-level panel on available stations and listening, by format. These data are combined with market-level demographic information (population, income, etc). Our focus in this study is on news stations. The underlying data are derived from four sources. First, underlying listening data are derived from Arbitron’s Fall 2005 and Spring 2006 surveys, which we combined to create 2005 data, as well as Arbitron’s Fall 2007 and Spring 2008 surveys, which we combine to create 2007 data. Second, station characteristics are obtained from the government-furnished information (GFI). These data include format designations. In particular, the “Format Category” takes on 20 values, including “news” and “talk.” The more detailed formats in the GFI (the “Format General” variable) allow us to see three separate substantial formats relevant to news and information: business news, news, and talk.3 The GFI also include data on the identity of each station’s owner (the Parent).4 Finally, the GFI include information on the number of news radio stations owned by firms operating newspapers. The station-level data are available for 2005, 2007, and 2009. 3 The Longitudinal_Radio_Long.dta dataset includes 3517 entries with FormatCategory=News. Of these, 3432 have FormatGeneral=News, 84 have FormatGeneral=Business News. One has FormatGeneral=Public Service. 4 The data include a “public” format, but this is not an exhaustive list of public stations and, indeed, does not include the news stations. 3 A third data source allows me to determine which of the stations is public. I obtained past NPR station lists from the Internet Archive (http://www.archive.org/web/web.php). I was able to obtain station lists dated July 2005, September 2006, March 2007, January 2008, and June 2008. I match 2005, 2007, and 2009, respectively, with NPR lists for July 2005, March 2007, and June 2008. Matching NPR data with the 3 news formats in the GFI produces 6 possible news formats: public and commercial news, talk, and business news, although there are no public business news stations. Hence, for the analysis, there are at most 5 distinct news formats in a market. The fourth underlying data source is the remainder of the GFI, including demographic information at the market level. III. Availability of News Programming Table 1 describes the availability of news programming overall in the roughly 300 Arbitron metro areas, as well as the availability of the five types of information stations: commercial business news, news, and talk; and public news and public talk.5 The top 300 Arbitron metro areas included 262 million people in 2009, so the populations reached by stations described in Table 1 include the vast majority of the US population. As Table 1 shows, stations classified as “news” stations – especially commercial news stations – are almost ubiquitously available in US metro areas. Nearly all of the sample markets (95 percent) had a commercial news station in 2009, while 41 percent of the markets had a public 5 I say “roughly” 300 because the number of metro areas included in the GFI varies from year to year. For example, the market-level dataset, RadioMarkets.dta, includes 296 markets for 2005, 301 for 2007, and 299 for 2009. I therefore refer to the number of markets included as “roughly 300.” 4 station. Because virtually all markets have commercial news stations, almost of the markets with public stations have both commercial and public news stations. The ubiquity of news stations arises even in the smallest sample metro areas: When we divide markets by population deciles, 83 percent of markets in the smallest deciles have a commercial news station, and 87 percent have either a commercial or a public news station.6 Commercial news is by far the most common sort of information station, followed by commercial talk. Next most common is public news. Least common are commercial business news and public talk. By construction, markets can have no more than five distinct news formats. The number of news varieties available varies between an average of 2.03 per market in the smallest decile of markets and 3.3 in the largest. The number of news stations varies more widely: from an average of 1.67 in the smallest decile to an average of 9.23 in the top decile. IV. Substitutability: Are Different News Formats Distinct? The near ubiquity of “news” stations raises the question of the similarity of the various types of news stations. For the sake of illustrating the point, if all five of the available news formats were identical, then much of the benefit listeners could derive from news stations would be achieved with the first local news station, and listeners would derive little benefit from additional news stations. Because virtually all markets have a news station, there would be very 6 For example, according to the GFI, listeners in the New York City metro area receive the following 14 news stations : WNJY-FM,WXLM-FM, WSTC-AM, WNLK-AM, WSHU-AM, WGCH-AM, WBBR-AM, WOR-AM, WCBS-AM, WINS-AM, WVOX-AM, WVNJ-AM, WABC-AM, WNYC-FM. Of these, the last 8 broadcast from inside the New York metro area. 5 little scope for different ownership arrangements – or anything else – to increase the benefit available from news stations. On the other hand, if different news stations and formats are distinct – for example, if public and commercial news stations are substantially different – then having an additional public news station would add a distinct variety to the set of local options. The more distinct that public news is from commercial news, the less that public news stations will draw listening from, and displace the operation of, commercial stations.
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